Wednesday, August 29, 2012

Legal Issues 2012 - Rhino horns and Christies vs the Russians

1. NEWARK, NY.- "An antiques dealer pleaded guilty Tuesday to obstruction of justice and creating false records, in relation to illegal rhinoceros horn trafficking. The guilty plea comes as a result of an investigation which included U.S. Immigration and Customs Enforcement Homeland Security Investigation (HSI) among the investigating agencies.

David Hausman, 67, of New York City, pleaded guilty to one count of obstruction of justice and one count of creating a false record in violation of the Lacey Act. Hausman was arrested in February 2012 as part of "Operation Crash." Operation Crash is a continuing investigation being conducted by the Department of the Interior's Fish and Wildlife Service (FWS) in coordination with HSI and other federal and local law enforcement agencies. A "crash" is the term for a herd of rhinoceros. Operation Crash is an ongoing effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns.

In the plea agreement, Hausman admitted that he committed these wildlife offenses while holding himself out to FWS as an antiques expert who purportedly wanted to help FWS investigate rhinoceros horn trafficking; in reality, he was covertly engaging in illegal activity himself.

According to court documents, in December 2010, Hausman – while purporting to help the government crackdown on illegal rhinoceros trading – advised agents that the taxidermied head of a Black Rhinoceros containing two horns had been illegally sold by a Pennsylvania auction house. However, in March 2011, upon learning that the sale was not finalized, Hausman covertly purchased the rhinoceros mount himself, using a "straw buyer" to conceal that he was the true purchaser, because federal law prohibits interstate trafficking in endangered species. Hausman instructed the straw buyer not to communicate with him about the matter by e-mail to avoid creating a paper trail that could be followed by law enforcement. After the purchase was consummated, Hausman directed the straw buyer to remove the horns and mail them to him. Hausman then made a realistic set of fake horns using synthetic materials and directed the straw buyer to attach them on the rhinoceros head in order to deceive law enforcement in the event that they conducted an investigation. After his arrest in February 2012, Hausman contacted the straw buyer and they agreed that the rhinoceros mount should be burned or concealed.

In a second incident, in September 2011, Hausman responded to an Internet offer to sell a different taxidermied head of a Black Rhinoceros containing two horns. Unknown to Hausman, the online seller was an undercover federal agent. Before purchasing the horns November 15, 2011, Hausman directed the undercover agent to send him an e-mail falsely stating that the mounted rhinoceros was over 100 years old, even though the agent had told Hausman that the rhinoceros mount was only 20 to 30 years old. There is an antique exception for certain trade in rhinoceros horns that are over 100 years old. By creating the false record as to the age of the horns, Hausman sought to conceal his illegal conduct. Hausman also insisted on a cash transaction and told the undercover agent not to send additional e-mails so there would be no written record. After buying the Black Rhinoceros mount at a truck stop in Princeton, Ill., agents followed Hausman and observed him sawing off the horns in a motel parking lot.

In February 2012, at the time of his arrest, agents seized four rhinoceros heads from Hausman's apartment as well as six Black Rhinoceros horns – two of which were the very horns he was seen sawing off in the parking lot – numerous carved and partially carved rhinoceros horns, fake rhinoceros horns, and $28,000 in cash.

Hausman faces a maximum sentence of 25 years in prison for these offenses.

The charges and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty. "

2.  We have seen several cases where the courts and not the experts have been making decisions as to the authenticity and subsequent value of art. That's our system; however, the ultimate arbiter of  these issues is the marketplace. So, although the court has ruled against Christies, ultimately the markets will determine what happens to this painting.

LONDON  The Art Newspaper "Christie's is standing by its attribution of a painting to the Russian artist Boris Kustodiev, which is at the centre of a long-running authenticity battle after a judge in London ruled last week (28 July) that “the likelihood is that Odalisque was not painted by Kustodiev”. Christie's was ordered to refund £1.7m to Aurora Fine Arts, a company owned by the Russian billionaire Viktor Vekselberg, which purchased the work in 2005. The judge cleared the auction house of claims of negligence and misrepresentation.

A spokesman for the auction house says: “We are surprised and disappointed,” adding that it stands by its attribution to Kustodiev. When asked whether the company would appeal he says it is “considering its options.”

The painting is dated 1919 and depicts a nude woman asleep. It is known to have been exhibited in Riga, Latvia, in 1932 and first sold at Christie's London salesroom for £19,000 in 1989. It was sold again by the auctioneer to Aurora Fine Arts in 2005. Doubts are thought to have been raised by an art dealer soon afterwards. By 2010, Aurora had filed its lawsuit.

During the 20-day hearing, Alisa Borisovna Lyubimova, a research fellow at the State Russian Museum, St Petersburg, said she was “almost 200% sure” that the work is not genuine. The judge also noted in his summing up that she would not change her view even if shown contemporary documents tending to suggest authenticity. Max Rutherston, who works as a consultant for Bonhams, argued that the quality of work by artists is not always consistently high and concluded that the painting was by Kustodiev's hand.

Archive material was presented, including research by Kustodiev's friend Vsevolod Voinov. His monograph of the artist's work notes a painting called Sleeping, 1919, which Christie's believes is the same work as Odalisque. Aurora, however, maintains that another list by Voinov refers to Sleeping as a drawing not a painting.

Debate during the hearing also focused on whether the signature on the work was contemporaneous with the rest of the painting. "

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